Money Box - Tax on lump sum withdrawals under new rules

jem16

jamesd wrote: »

"If you are unable to obtain this reference you may enter NONE. However, it is important that you do not enter NONE where you are, or have been, employed, or in receipt of a pension, as this might result in your form being rejected and your personal details remaining unchanged."

Whether HMRC can or would choose to use this for a person calling them before a first payment is up to HMRC but the capability appears to be there to obtain the reference in advance or use a NONE reference instead.

It's a bit unclear what this is in reference to but it doesn't sound like a way of receiving a tax code before a first payment. It sounds more like a tax return entry or a claim form for repayment of tax.

If you are unable to obtain this reference you may enter NONE. However, it is important that you do not enter NONE where you are, or have been, employed, or in receipt of a pension, as this might result in your form being rejected and your personal details remaining unchanged.

If you are not employed, have never been employed, and are not in receipt of a pension you should enter NONE and ensure you complete the Unique Taxpayer Reference if you have one. If your main income is from a State Pension or benefit, please ensure you tick the appropriate checkbox.

NONE doesn't sound like it should be used for most people as they would have been employed at some point.

I've no real idea why they didn't do this for jem16

As I've been employed and in receipt of another pension it wouldn't have been appropriate anyway. However I suspect this has nothing to do with issuing a tax code.

but maybe they just decided that it was a regular payment so the tax difference would be corrected soon enough anyway.

It could have been sorted in [STRIKE]May[/STRIKE] February but HMRC chose to apply a Month1 basis to the corrected tax code to ensure I wasn't hit with a large underpayment. I could have insisted on a cumulative tax code but decided it wasn't worth the bother as I'll sort it in my tax return and it's an interest free loan from HMRC.